Societe Generale and Absa Group Limited have announced the signing of a Memorandum of Understanding to roll out a commercial agreement and expand their activities through the development of a pan-African wholesale banking offering. Separately, Absa agreed to acquire Societe Generale’s custody, trustee and clearing services operated in South Africa, enabling Absa to advance its growth strategy.
Societe Generale operates in 19 African countries, mainly in Western and Northern Africa, while Absa has a presence in 12 countries, primarily in Southern and Eastern Africa.
This partnership will leverage on Societe Generale and Absa’s geographical complementarity and combined strengths to reinforce their expertise and offer a wider range of banking products and services to international and domestic corporate clients and financial institutions with operations in Africa.
“Large African companies and multinational groups present in Africa have increasingly sophisticated banking needs and require expertise that was mostly delivered in more mature economies. On the other hand, there are more and more regional champions on the continent for whom national markets have become too narrow. Joining our forces through this agreement makes perfect sense to accompany the economic development of the continent,” comments Frédéric Oudéa, Chief Executive Officer of Societe Generale.
While this is a non-exclusive agreement, the pan-African offering will be enriched over time with new complementary services and products.
The combined offering results from an innovative approach driven by Societe Generale and Absa’s shared ambition in Africa: to better serve clients, both local and international, in their banking needs across the continent.
“The agreement we have entered into should go a long way to enable our clients to do business in Africa regardless of where they want to do business. This is yet another example of how Absa is delivering against our growth strategy through both partnerships and acquisitions where relevant and appropriate,” says Maria Ramos, Absa Group Chief Executive Officer.
As part of Absa’s international and China strategy, the Group will be rolling out China service desks in key African countries to complement its desk in South Africa. These desks will allow Absa to extend its strong local offering to Chinese multinational corporates. Through the new cooperation agreement, Absa will be able to leverage on Societe Generale’s strong presence in China.
Societe Generale has reached a separate agreement to sell its custody, trustee and derivatives clearing services operated in Johannesburg to Absa Group Limited. Absa agreed to acquire the related activities conducted by Societe Generale in South Africa, notably its client portfolio, IT systems and all the employees dedicated to these activities. The transaction is subject to the approvals of the relevant authorities, which are anticipated to be obtained by end of 2019.
The securities lending and borrowing services are not part of the transaction and will be terminated by end of March 2019.
Furthermore, Societe Generale and Absa intend to cooperate on the provision of securities services as part of the enrichment of the pan-African and global offering.
